race. the democratic national convention in charlotte, north carolina, starts tuesday with jimmy carter and michelle obama on the list of first day speakers. we'll have much more from charlotte in our next hour. i'm randi kay. i'll see you back here at the top of the hour. your bottom line begins right now. good morning, everyone. i'm christine romans. the republican party is obsessed with the mounting debt in this country. call it the party's new religious right, getting religion on debt deficits after they spent years helping run them up. let's start with the fact that, yes, america has a debt problem. we all agree. one of the lasting images of the republican national convention, two giant clocks counting america's debt. one started tallying up the dollars since the conventn began on monday and the other shows the total amount the government owes. that number is nearing an almost impossible $16 trillion.

what you won't hear is the republican-backed policies that help run up the clock. here are official government statistics visualized by the center budge priorities. take a look at this. if you look at what is in our huge mounting national debt, you can see broken out some of these different factors. for example, right here these are tax cuts, bush tax cuts. right there a huge chunk of our debt. take a look at this. wars. this the second layer on this cake right here. right here this is the economic crisis, this blue wedge is how much the crisis has added to our national debt because the economy has stalled out. want to taub about bailouts, those hated bailouts? they are right here. this line. freddie, fannie and t.a.r.p. there. these are rescue efforts, stimulus right here, also hated by the gop. this is debt, 20% size of our economy, the debt before you put those things on there. if we do nothing, if we do

nothing 2019 debt will account for more than 80% of our gdp or nearly all the goods and services this country produces in one year. greg joins us chief trat gist at potomac research group, david walker also with us, ceo of comeback mark initiative and former u.s. comptroller. let's start with you. the gop says the president has racked up an unforgivable almost $6 trillion in debt in one term. that number is true, but is it all obama's fault? >> no. the truth is that george walker bush or 43 and president obama have both been fiscally irresponsible. 2003 was the year things started spinning out of control. but the debt clock really low balls our problem. >> you said 2003. we haven't talked about medicare part d. that wasn't in my chart. both parties loved medicare part d. was that the beginning, you think, of this debt explosion?

>> christine, three things happened in 2003. individually they were irresponsible, in combination they were reprehensible. we had a second round of tax cuts we couldn't afford because we already returned the deficits. we invade a sovereign nation without declaring war, without paying for it called iraq. medicare prescription drugs was passed that added $8 trillion in new unfunded promises when medicare was already unfunded by $20 trillion. >> he's talking back in 2003. do republicans have a short memory or are they truly getting religion on debt here. >> they may have religion now, christine, but their conversion has been awfully recent. on many issues like bailout, prescription drug benefit, most republicans, including obviously paul ryan have done a lot. let me make one other point. in these ten years you cite i've heard people for decades say if

we don't do anything about the deficit, the interest rate will go straight up. for those years we didn't do anything about the deficit and interest rates went straight down. here is the problem. 70% of our new debt in the last year and a half has been purchased by federal reserve. we are self-dealing in our own debt. we are artificially keeping down interest rates to pump up the economy to try to help the housing market. most of the rest of our debt has been purchased by china and japan because they have positive trade balances. we are living on borrowed time. our biggest problem is not what's on the balance sheet, it's what's off the balance sheet. unfunded pensions, retiree health care, underfunded social security, medicare promises. that's the problem. they are not deficits and debts today but they will be tomorrow. >> two clocks on the stage, want to circle it back around. two clocks on the stage at the rnc. yet governor romney really focusing in his big speech about creating 12 million jobs in four years. can he cut debt like the way he

says he wants to and the party wants to and create so many jobs at the same time? i'm hearing so much more about debt -- debt and jobs at the same time and i'm wondering if one is at cross purposes with the other. >> we'll see. these concepts, i think we can all agree on. we'd like to have a lower deficit. we can use this money for more productive uses. we'll see if the promises prescription can work. then you look at the details which are so difficult. this congress can not even reform the post office because they don't want to cut any local post offices in their home districts. so you can talk in a general way about cutting deficits. when you get to the details, people get cold feet. >> this congress couldn't agree on what kind of pizza to get for lunch, honestly, let alone to things that matter to middle class families. keep coming back. keep talking about this, not much type before the election and fiscal cliff looming. president obama is attacking minimum for saying small classes

in school don't guarantee students' success. problem is, those comments sound a lot like comments president obama's education secretary made two years ago. we'll ask secretary duncan if he stands by what he said. that's next on "your bottom line." [ ding ] oh, that's helpful! well, our company does that, too. actually, we invented that. it's like a sauna in here. helping you save, even if it's not with us -- now, that's progressive! call or click today. no mas pantalones!

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>> when it comes to education, president obama and mitt romney agree on more than both sides will admit. they want more charter schools. both of them want teacher compensation tied to performance and they both support low interest rates on staffer loans that help pay for college. where they disagree is on the role of federal government. mitt romney praises some aspects of the obama's administration's race to the top program but says he would give more control to state and local governments. the federal government pays 12.5% of elementary education. the government imposes sweeping mandates but leaves others to pay the bill. in april mitt romney says if he becomes president the department of education will be consolidated with another agency. it will be a heck of a lot smaller. secretary of education arne

duncan leads that. he's with me now. thank you nor joining me. we haven't heard much until this week, the president campaigning in iowa talking to students and romney campaign took out an ad. mitt romney said under president obama it costs more to go to college. he says there are fewer opportunities when students graduate, less likely to be employed, half of them unemployed or underemployed. tell me, why would this get any better if president obama has another four years. >> what president obama and i fundamentally believe we have to educate our way to a better economy. our children today aren't competing for jobs in their neighborhoods or districts or state. our young people are competing with jobs with children in india, singapore, south korea, japan. we have to have the most educated workforce in the world. we're so proud to see college enrollment going up. we're trying to lead the world in college graduation rates again. we used to lead the world a generation ago. today we're 16th. we have to invest.

we're thrilled we have over 10 million young people having access to pell grants today. the other side, they would see a huge reduction of pell grants, a less educated workforce. i don't think that's what individuals or families or the country needs. we have to educate our way to a better economy. >> it's interesting these other countries in the world they are doing it with larger class sizes and much fewer dollars per student. why with how much money we're spending on education, why aren't we getting more for our money in public school education. >> we have to continue to invest but we have to invest in reform not in the status quo. we've been thrilled to see 46 states raise standards, huge leadership at the state level. college and career ready, internationally benchmark standards, no longer dummy down standards to make politicians look good, lie to children, lie to parents, bring in next generation of extraordinary teachers, try to invest in early childhood education. rather than pointing fingers, all of us have to come to the table. we have to challenge students to

take their own education seriously. we have to challenge parents to be a full and equal partner with teachers. my wife and i have two young children in public elementary school. we holdurselves accountable making sure we're there in the evening doing homework, a team, a partnership with our children's school. >> do you think teachers should be paid for tenure or performance? >> i said repeatedly we need to pay teachers a lot more money. teachers -- no one signs up for education to a million dollars or get rich but shouldn't have to take a vow of poverty either. we have to invest in our teacher workforce. we're going to have about a million teachers retire. our ability to attract and retain great talent over the next four to six years is going to shape public education for the next 306789 it's a once in a generation opportunity. called the respect initiative to talk about how we collectively elevate and strengthen. >> talk about class size, the campaign, obama campaign has been criticizing mitt romney over comments he made on class

size. let's listen. >> the school district with the smallest classrooms, cambridge, had students performing in the bottom 10%. just getting smaller classrooms didn't seem to be the key. >> you know, mr. secretary, that sounds a little like something you said two years ago. you said that while small class sizes were beneficial for young students in secondary schools district may be able to save money without hurting students while allowing modest but smartly targeted increases in class size. i don't see a lot of daylight between your position and mitt romney's. can you clear it up for me? >> absolutely. in the early grades we're teaching young children how to read, particularly disvakd communities, having smaller class sizes are important. we also want to make sure there a great teacher in every single classroom. great teachers make a huge difference in students' lives of as you got older more flexibility. anyone who said we need less teachers or art or extracurriculars fundamentally doesn't get how important a well

rounded world-class education is. >> let's talk about one more point in vouchers. let's listen to something mitt romney says about that. >> i'm going to expand parental choice in an unprecedented way. too many of our kids are trapped in schools that are failing or simply don't meet their needs. for too long we've merely talked about the virtue of school choice without really doing something about it. >> parents are getting impatient because the kind of public school education you get depends on where you live, depends on your zip code. what's wrong with letting parents take federal dollars and choose their school. >> our goal toys make every single public school a great public school. the overwhelming majority of children in the country, 90, 95% are going to public schools. we have to make sure they have a chance to go to a great school. we've been very impatient with the status quo. we had a number of schools around the country not high performing. some were dropout factories. we are turning around 1300 schools around the country with

tremendous parental participation. just in the first year or two. all these schools have a long way to go. huge steps in the right direction. huge increases in student achievement. increases in graduation rates, reductions in dropout rates. the challenge and the opportunity is to make every single public school a great, great school for their community. >> if congress doesn't act, the u.s. is going to fall over this fiscal cliff. tax increases and budget cuts that hit at the beginning of the year, the countries, as you know, largest teachers union, they say that will mean 8% spending cuts for education, 80,500 job losses. what's your contingency plan? what happens to the department of education and public school education if we go over the fiscal cliff? >> it's very simple. children will get hurt. there's no upside to having many less children have access to head start. there's no upside in investing less in poor children, students with disabilities. there's no upside to seeing class size explode.

no less side to less extra cricklers, no upside to having less access to pell grants so they can go to community college, tour year college, be a productive citizen and participate in the economy. we have to do the right thing. we fundamentallily think of education as investment, not expense. we have to invest in reform not in the status quo. >> would you think there's a risk we really go off the fiscal cliff? do you think we'll really see congress have massive across the board spending cuts? >> i really hope that doesn't happen. again, sequestration was set up for mutual self-destruction. there's no upside there. again, other countries are doubling down on education. other countries aren't cutting back. our children are as smart, talented, creative as entrepreneurial children in the world, we have to give them a chance to compete. what you're seeing in congress, i have to believe at the end of the day congressional leaders will come together and do the right thing for our nation's children, the economy and the

country. >> thank you. >> thank you so much for the opportunity. >> coming up, mitt romney talks a lot about school choice and vouchers. but only a fraction of our children are enrolled in private schools. former education secretary bill bennett what a romney administration would mean for america's public schools. ntrol. [ engine revs ] during the golden opportunity sales event, get great values on some of our newest models. this is the pursuit of perfection. you want to make sure it goes up and stays up. [ chirp ] with android apps, you get better quality control. so our test flights are less stressful. i've got a lot of paperwork, and time is everything here. that's why i upgraded to the new sprint direct connect. [ chirp ] and the fastest push-to-talk nationwide. [ male announcer ] upgrade to the new "done." [ chirp ] with access to the fastest push to talk, three times the coverage, and android productivity apps. now when you buy one motorola admiral rugged smartphone, for ninety nine ninety nine, you'll get one free. visit a sprint store, or call eight five five, eight seven eight, four biz. 8% every 10 years.age 40, we can start losing muscle -- visit a sprint store, wow. wow.

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so, you heard from the man at the top of president obama's education department. now i want to introduce you to bill bennett. he was the man at the top of president reagan's education department. you've seen him on the show before. he's a cnn political analyst. welcome to the program. >> thank you. >> great to see you, bill. you know paul ryan. i'm told he used to write some of your speeches -- >> great to be here. >> i want you to listen to what paul ryan said at the republican national convention. >> college graduates should not

have to live out their 20s in their childhood bedrooms, staring up at fading obama posters and wondering when they can move out and get going with life! >> bill, is paul ryan, vice presidential candidate ryan, is he really trying to tell young people it's the president's fault they're living at home? >> yeh. look, we know half of our college graduates are either unemployed or underemployed. that's a fact about the economy. what the president does or doesn't do has something to do with the economy. so, yes. he's not obviously the only factor, but we have had a rule in american politics since ronald reagan -- what happens on your watch, you're responsible for, you know? are you better off or are you worse off? and when it comes to college graduates and the economy, boy, are they worse off. >> i'm going to push back a little there, bill. tuition is up 20% since the 1980s. i'm not going to blame you or ronald reagan because tuition was raising in their tenure. why are you blaming obama? >> well, you can't blame me

because i was trying to get it under control, and i'm the one who came up with what's now known as the bennett hypothesis, which is the availability of money increases the price of higher education, and i think it's been proven now by the scholars. the higher amount you put in to higher education at the federal lel particularly, the more the price of higher education rises. it's the dog that never catches its tail. you increase student loans, you increase grants, you increase pela grants, stafford loans, and what happens? they raise the price. >> it's like the housing bubble -- >> way above the rate of inflation, the reason is -- >> the more available in the housing market leads to a bubble in prices, and at some point ha has to pop. you're saying education's like that, too. >> very similar. and the reason there's a difference in the administrations. you can say republicans have their ties and their people with whom they're close. the higher education lobby, the education lobbies in general, are lockstep with the democrats and the liberals on this, and it's not a good combination.

it hasn't been good for students at the elementary and secondary level and it hasn't been good for students at the higher education level. but try to introduce serious reform into this area and you will get mowed down by the democrats who -- >> we can all agree on reform and improvements to public education, but what kind of reform? reform is a very subjective thing when you start digging into education. you know, and i hear a lot from mitt romney about school choice. that's red meat for the base, of course, but you know, 90% of american kids go to a public school. public schools are losing teachers, bill, they're losing music programs. middle class families are paying for their kids to be in sports. >> i know. >> classes are bigger. how would romney's policies benefit the vast majority of students in public schools? if you focus on choice, are you neglecting the fact that we need to fix the public schools? >> no, we do need to fix the public schools, but i think the best way to fix them is through competition. there's been too much emphasis on the schools, not enough on the students, and therefore, we've thought about the resources schools have as the

primary concern rather than whether students are learning. if you take -- not to get overly complicated, but if you take title one, chapter one, which is one of the largest single education programs. it helps kids way behind in math and reading. you strap the money to the back of the children, let them go where they want to go, most of them will end up going to public schools, but they will choose their public schools. it's just like the charter school movement, and that would be a very good thing. >> all right, bill bennett, stick with me. because coming up, mitt romney says he wants american students to be ready for the 21st century, for 21st-century jobs, but to reform the school system, he is going to need the support of a group that's backing his opponent. are you okay, babe?

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america's the world's biggest economy and still the leading superpower, but it won't stay that way if the quality of

a public school education depends on your zip code. former education secretary bill bennett is back with me. bill, new jersey's governor, chris christi, he's taking on teachers unions. here he is at the republican national convention. >> we believe that the majority of teachers in america know our system must be reformed to put students first so that america can compete. they believe in teachers unions. we believe in teachers. >> the they, of course, he's talking about there, obama administration officials. bill, does a romney administration have any shot at genuine school reform if it antagonizes union leaders? >> yes, it does, not if it antagonizes all the teachers, but that's the distinction that chris christie's making. and increasingly, christine, that's the distinction the public's making, between teachers who can be good or bad or in the middle and teachers unions, which for the most part have been inhibiting any serious kind of education reform. ronald reagan won a majority of

teachers. more teachers voted for ronald reagan than walter mondale, and this could happen again if people see the future of education in somewhat different and unconventional terms. it does require a change. it does require reform. but i think it's an appealing reform. there are states, like new jersey, where let's give chris christi credit, but let's give some of the union leadership credit, too, where they came to the table, they worked things out. nothing's going to happen if both sides are intransigent, and the unions will not cooperate. you will see them lose more and more members, as they are doing, and more and more students. >> bill bennett, thanks so much for being here today and we'll talk to you again very soon. we're going to keep talking about public schools, teachers' union s, teacher reform, this administration and what a romney administration would look like. if your child is in public school, there is a good chance that the teacher in front of the class is a member of the nea with 3.2 million members, by far the lar